"The past few years people have been scared that Tether has been printing their Tether coins out of thin air and buying bitcoin with it, which might be the cause of last year's run up," Lee said. "And if they actually do have the USD backing that means that the run-up is created by real demand and not fake demand. That's really good news."

Investors have to protect their cryptocurrency better

Brian Kelly, founder and CEO of BKCM LLC, an investment firm focused on digital currencies, advised investors to hold their cryptocurrency in cold storage — which involves storing it offline — if possible.

Exchanges are "kinda the weak point here," Kelly said on "Fast Money" Wednesday.

Lee added that the cryptocurrency industry is relatively new, and exchanges are still learning to protect their funds.

"People have to get used to that, they really need to protect their coins much better than traditional finance," he said.